Macy's Plenti exit makes a lot of sense
Since its launch in 2015, the multimerchant Plenti rewards program has struggled to find a place with U.S. consumers.
This coalition loyalty program seemed like a promising idea. It’s basically a credit card rewards program without the credit card.
Plenti offered consumers the ability to collect loyalty points at many different retailers under a single program and use those points at any retailer within the program.
However, at the end of 2017, Direct Energy, Hulu, Nationwide, Enterprise, Alamo and Expedia exited the program.
Recently, the outlook has grown even more dismal. The retail giant Macy’s has announced that it will be dropping out as well. With the remaining retail anchor gone, the future isn’t looking good for Plenti. Coalition loyalty programs like Plenti just haven’t worked well in the U.S.
Less than half of self-identified Plenti members said they have ever redeemed for a reward through the program. Most members said they only purchase from one or two coalition members. That defeats the point of the coalition model and it doesn’t create any real loyalty for any of the brands involved.
Real customer loyalty is about listening to your customers to establish personal, emotional connections with them. That’s how lasting, profitable relationships are built.
To do that successfully, you need to collect and understand data about your customers. With a coalition loyalty program like Plenti, there is very limited access to data that would allow you to effectively personalize and market to members.
Since there are many retailers operating under an umbrella in a coalition program, all that valuable data is siloed. Plenti may be able to collect a massive amount of data, but are the retailers in the program benefiting from it?
Modern loyalty programs need to consider buyer personas and buyer journeys. Retailers need to know what motivates their customers and create personalized offers and campaigns to drive behavior.
Retailers also need to differentiate themselves from competitors. From launch to ongoing improvements and changes over time, your loyalty program needs to help your brand stand out. By design, coalition loyalty programs can’t do this for individual brands because all the competitors are in the same program with the same benefits.
They are created with a group of business and customers in mind, not your business and your customers. When it comes to loyalty programs, one size does not fit all, and coalition programs just don’t have much brand value. The key to a successful loyalty program is a custom program that speaks to the needs of your specific customers. And it must be adaptable over time.
Loyalty programs should enhance your brand through all your customer-facing marketing. Macy’s Star Rewards is all over their social media, stores and supporting materials. Plenti doesn’t say anything about the Macy’s brand. It only enhances the Plenti brand.
That’s why it makes sense for Macy’s to invest in their own Star Rewards loyalty program and leave Plenti. They have their best interests in mind. Coalition loyalty programs gained steam because it seems like they can drive transactions, but they don’t create loyalty to any one brand.
It’s clear that Macy’s understands how a strong loyalty program can and should be a differentiator in a tough time for retail.
2018 doesn’t look promising for Plenti, but we’ll continue to see proprietary loyalty programs like Star Rewards strengthening.